The Stimulus that Won't Stimulate - by Irwin Nesoff

We’re all too familiar with that old adage “when life gives you lemons…” Well, for the last seven years the Bush administration’s economic policies have been turning our economy from lemonade to lemons. After two terms of failed economic policies, President Bush, joined by the Democratic controlled Congress, is offering us a stimulus package that is nothing more than an ill-conceived giveaway. Do we still remember how Mr. Bush inherited a record budget surplus and turned it into a record budget deficit in just two short years? His response to the surplus was to give out huge tax cuts to the wealthiest Americans while buying off the middle class with a several hundred dollar tax rebate. Now his response to a wrecked economy is tax cuts for the wealthy and tax rebates. How does the same failed policy address two different economic conditions?
Well, now that the US economy has been turned into a lemon that nobody wants to invest in, the administration along with its lap dogs on both sides of the Congressional aisle offer us peels and seeds while holding the lemonade for their few, favored supporters and contributors. This bi-partisan stimulus package puts the tax rebate in the hands of those who are already doing okay financially and would most likely get along without the additional few hundred dollars, thereby not adding a stimulus as much of this extra money is apt to find its way into savings accounts. The Democrats gave into the Bush ideology of no more money for low income and poor people, when they agreed to drop an extension of unemployment benefits and additional food stamp aid. Both of these would have gone to people most likely to spend the money immediately.
Tax breaks for business to increase investment is an unproven response as it may take months for businesses to make investment decisions, and interest rates are currently quite low, so businesses that are prepared to make capital investments already have access to low interest loans.
According to the Economic Policy Institute, an effective stimulus package should include four components: infrastructure investments, relief to states, extending unemployment and tax rebates. Funding improvements to America’s aging and failing infrastructure will provide jobs while making much needed improvements. Federal fiscal relief to states would help to avoid cutbacks in essential services and reduce layoffs. Such a stimulus package would create jobs and growth and help jumpstart the economy by having a faster impact, it would not increase long-term budget deficits nor would it increase the level of income inequality that exists in America today.
So why then do we have a bipartisan stimulus package that will only serve to increase the budget deficit and have minimal impact on the economy? One thought; presidential and congressional election year. What better way to buy votes than to return to voters “their” money?”
But perhaps we Americans are smarter than our elected representatives believe. Perhaps we can’t be bought off so easily. One way that we can show our concern for the failing economy and those that are hurt worst by it is to donate half of the tax rebate to a food pantry. In the seven years of the Bush administration federal support for food and nutrition programs have been reduced greatly while the demand has increased. Food banks across the country are reporting record demand and decreasing support.
So I am gong to send half my rebate to a local food bank, because nobody should go hungry in the wealthiest country on the planet, and because my tax dollars would be better utilized helping those most hurt by the Bush economic policies, rather than buying consumer goods or clothing that are manufactured in China and will not create one US job. As one economist put it, and I quote with some license, “The rebate will be spent on consumer goods from China and the US will have to borrow from China to fund the $150 billion stimulus package, making the Chinese the only ones who will benefit from this plan.”
We will all feel better knowing that our tax dollars prevented some child from going to bed hungry. I hope you will join me and contribute half your rebate to a local food bank or food pantry. Together we can make a difference.

Every Child Matters

Homeland Insecurity

...Why children must be a priority in the 2008 presidential campaign

A new report by the Every Child Matters Education fund focuses on the issues facing millions of America's children and families including health, child abuse, imprisonment and poverty. Additional challenges include substance abuse, homelessness, the lack of quality child care for millions of children while parents work, no access to school readiness experiences for millions more, and yet additional millions unsupervised and alone every day after school.

The report documents statistics such as: 8.6 MILLION American children are without health insurance, more than 3 MILLION are reported abused and neglected, nearly 2 MILLION have parents in prison, and 13.6 MILLION live in poverty’s grip.

The report provides facts and figures to back up its call for new investments in children and families.

READ THE FULL REPORT AT http://www.everychildmatters.org/2008/HomelandInsecurityBooklet.pdf

New Report Rates US Health Care Worst of Nineteen Industrialized Nations

Measuring the Health of Nations: Updating an Earlier analysis

"This study in Health Affairs reveals important realities about the health care system in 19 countries: 14 Western European Countries, Canada, New Zealand, Australia and Japan. Researchers compared international rates of "amenable mortality," which are deaths before the age of 75 that are potentially preventable if health care is regular and effective throughout one’s life. France is said to have the best health care system and the least rate of ‘amenable mortality’ and the US is said to be the worst in terms of its health care system."
(http://www.globalaging.org/index.htm)

For a copy of tyhe full study: http://www.globalaging.org/health/world/2008/nations.pdf

A Workable Economic Stimulus Plan from the Economic Policy Institute

TIME TO BOOST ECONOMY IS NOW, EPI ADVISES
Economic stimulus plan makes case for quick, strong, well-targeted action to soften blow of coming recession

After months of battering by the housing and credit industries and a year of slowdown in job growth, there is broad agreement that the economy is tipping into recession or rising unemployment. This past holiday season was the weakest for retailers since 2002 making it unlikely that cash-strapped consumers will be able to buy our way out of the slump and gives credence to rising concern that the recession we’ve been dreading may already have arrived.
Against this backdrop, the Economic Policy Institute unveiled a broad-based, three-part prescription for stimulating the economy. "

EPI’s plan, titled "Strategy for an Economic Rebound," calls for federal investment of about $140 billion (1% of total GDP) – an amount big enough, when properly targeted, to make a difference. To achieve optimal targeting, that amount would be allotted among four kinds of expenditures: infrastructure, relief to the states, help to unemployed individuals, and targeted tax rebates.
Infrastructure: EPI recommends investing about $40 billion right away to accelerate needed public infrastructure repairs for bridges, schools, roads, and the environment. Such investments would address existing needs that would otherwise go unmet during a downturn. Such investments would be less likely than other kinds of expenditures to "leak" to other countries through purchases of imports. They would generate jobs not only for those working directly on these projects but would also boost and expand the businesses that supply parts and materials.
Relief to states: Another $30 billion should go to the states to help them avoid cutbacks in services, programs, and jobs that would exacerbate the recession. The money for states would be split evenly between general revenue sharing and a temporary raise in the federal Medicaid match.
Help to unemployed: Making unemployment benefits available to the long-term unemployed would, at a cost of about $5 billion, help the people hit hardest by rising joblessness. The plan lays out a number of specific reforms that EPI recommends to make the current unemployment insurance system more effective as a safety net for workers displaced by rising unemployment, which is expected to rise a full percentage point by the end of the year.
Tax rebates: $65 billion of the total investment should be dedicated to tax rebates that are targeted to those paying either payroll or income taxes-$350 per person or $700 per married couple. These rebates target those most likely to spend the money and thus create greater demand for jobs – namely working families at the middle and lower end of the income scale.

This combination of investments meets the key tests for an effective economic stimulus – in contrast to the approach taken by the Bush administration:

1. An effective stimulus plan creates jobs and economic growth: The EPI approach increases jobs directly or indirectly related to needed infrastructure repairs. The Bush administration’s "Jobs and Growth Plan" for the previous recession underperformed on both, yielding a protracted period of job losses followed by a very slow-growth recovery period. EPI’s plan will spur growth by focusing on mechanisms for increasing consumer spending through tax rebates for people who are most likely to spend the money, thus cushioning the drop in demand for consumer goods that would accelerate job losses. In contrast, approaches that funnel money directly to businesses won’t offset or stem job losses in a time of falling demand.

2. Stimulus should take effect quickly: By definition, a stimulus plan needs to provide a quick jump start to the economy. The elements of EPI’s Strategy for an Economic Rebound can be acted on and take effect quickly to shore up the sagging economy. The approaches favored by the administration – making the previous round of tax cuts permanent, for example – would come far too late to have the needed impact.

3. Stimulus should not create long-term budget deficits: The increased deficit incurred by a quick infusion of money into the economy should be temporary. EPI’s plan meets this criterion through a combination of accelerating planned spending on infrastructure needs, temporary help to states, and one-time tax rebates – unlike the permanent tax cuts favored by the Bush administration.

4. Stimulus should not exacerbate social and economic inequities. The EPI plan’s targeting of benefits to the unemployed and tax rebates to low- to middle-income families is good both for the economy and for the society. In contrast the Bush administration approach of tax cuts to the wealthy not only provides less net gain for the economy as a whole, it also aggravates the nation’s rising inequality between ordinary working Americans and the fortunate few at the top.

READ THE COMPLETE REPORT: http://www.epi.org/content.cfm/bp210

America is Immigration: Five Immigration Myths Explained

American Immigration Lawyers Association

Anti-immigration groups, in their efforts to further restrict immigration and oppose any positive reforms to our immigration system, often propagate myths to support their agenda. Several of these myths are addressed below—together with facts to set the record straight.

Myth Number 1: Immigrants take jobs away from Americans.
It is not true that immigrants take jobs away from Americans. Here’s why:
• Immigrants do not increase unemployment among natives. A study by economists Richard Vedder, Lowell Gallaway, and Stephen Moore found that states with relatively high immigration actually experience low unemployment. The economists believed that it is likely immigration opens up many job opportunities for natives. They wrote, “First, immigrants may expand the demand for goods and services through their consumption. Second, immigrants may contribute to output through the investment of savings they bring with them. Third, immigrants have high rates of entrepreneurship, which may lead to the creation of new jobs for U.S. workers. Fourth, immigrants may fill vital niches in the low and high skilled ends of the labor market, thus creating subsidiary job opportunities for Americans. Fifth, immigrants may contribute to economies of scale in production and growth markets.”
• Research on immigration’s labor market consequences on minorities has also yielded information that suggests little negative impact. In her study on immigration’s impact on the wages and employment of black men, the Urban Institute’s Maria E. Enchautegui concluded, “The results show that in the 1980s black men were not doing worse in areas of high immigration than in other areas and that their economic status in high-immigration areas did not deteriorated during that decade.”
• There is no such thing as a fixed number of jobs. Contrary to the belief that an increasing number of people compete for a static number of jobs, in fact, the number of jobs in America has increased by 15 million between 1990 and 2003, according to the Bureau of Labor Statistics (U.S. Department of Labor). Between 2000 and 2010, more than 33 million new job
openings will be created in the Unites States that require only little or moderate training, according to the Bureau of Labor Statistics. This will represent 58 percent of all new job openings.

Myth Number 2: Most immigrants are a drain on the U.S. economy or treasury.
Here’s the truth about immigrants, taxes and the economy:
• Significant total taxes are paid by immigrants. Immigrant households paid and estimated $133 billion in direct taxes to federal, state, and local governments in 1997, according to a study by Cato Institute economist Steve Moore.
• The level of state tax payments approximates that of Americans. Immigrants in New York State pay over $18 billion in taxes, over 15 percent of the total, and roughly proportional to their size in the state’s population, according to a study by the Urban Institute. Average annual tax payments by immigrants are approximately the same as for natives--$6,300 for
immigrants versus $6,500 for natives.
• States come out ahead. In Congressional testimony, University of California, Berkley economist Ronald Lee, the principal author of the fiscal analysis in the National Academy of Sciences study, concluded that a dynamic analysis, with the appropriate assumptions, would likely show that 49 of the 50 states come out ahead fiscally from immigration, with
California a close call.
• Long-run benefit. The National Academy of Sciences concluded that “Over the long run an additional immigrant and all descendants would actually save the taxpayers $80,000.”
• Overall economic benefits of immigration. The report by the National Academy of Sciences also found that immigrants benefit the U.S. economy overall, have little negative effect on the income and job opportunities of most native-born Americans, and may add as much as $10 billion to the economy each year. As a result, the report concluded, most Americans enjoy a healthier economy because of the increased supply of labor and lower prices resulting from immigration.

Myth Number 3: America is being overrun by immigrants.
Here are the facts on immigration statistics:
• The number of immigrants living in the United States remains relatively small as a percentage of the total population. While the percentage of U.S. residents who are foreign-born is higher today than it was in 1970 (currently about 11 percent), it is still less than the 14.7 percent who were foreign born in 1910.
• The annual rate of legal immigration is low by historical measures. Only 3 legal immigrants per 1,000 U.S. residents enter the United States each year, compared to 13 immigrants per 1,000 in 1913.
• The 2000 Census found that 22 percent of U.S. counties lost population between 1990 and 2000. Rather than “overrunning” America, immigrants tend to help revitalize demographically declining areas of the country, most notably urban centers.

Myth Number 4: Immigrants aren’t really interested in becoming part of American society.
Here’s information about immigrants’ feelings about the country and the future:
• Immigrants are more optimistic about the nation’s future. “A poll of Hispanics finds they are far more optimistic about life in the United States and their children’s prospects than are non-Latinos,” according to an August 2003 New York Times/CBS News poll.
• Immigrants want to become proficient in English. Reports from throughout the United States indicate that the demand for classes in English as a second language far outstrips supply. Data from fiscal year 2000 indicate that 65 percent of immigrants over the age of five who speak a language other than English at home speak English “very well’ or “well.” The children of immigrants, although bilingual, prefer English to their native tongue at astounding rates. In fact, the grandparents and parents of immigrant children have expressed some concern that their youngsters are assimilating too quickly.

Myth Number 5: Immigrants contribute little to American society.
The facts show that immigrants contribute significantly to America:
• Immigrants show positive characteristics. A Manhattan Institute report showed that immigrants are more likely than are native born to have intact families and a college degree and be employed, and they are no more likely to commit crimes.
• Immigrants help with the retirement of the baby boom generation. While countries in Europe and elsewhere will experience a shrinking pool of available workers, the United States, due to its openness to immigration, will continue healthy growth in its labor force and will reap the benefits of that growth. [Former] Federal Reserve Board Chairman Alan Greenspan
has stated that “Immigration, if we choose to expand it, could prove an even more potent antidote for slowing growth in the working-age population.”
• Immigrants contribute to entrepreneurship. Inc. Magazine reported in 1995 that 12 percent of the Inc. 500—the fastest growing corporations in America—were companies started by immigrants.

Conclusion
In sum, who are these people we call immigrants? They could be your parents, your grandparents, your teachers, your friends, your doctors, your policemen, your grocer, your waiter, your cook, your babysitter, your gardener, your lawyer, your favorite actor, actress,
or sports hero, your shop keeper. Immigrants permeate the fabric of America. They are an integral part of our society, its goals and its values. The backbone that helps make this country great, they set us apart from every nation in this world. In short, they are us.

A PDF of this article, with sources cited, is available at:
http://www.afsc.org/central/ImmigrantRights/documents/FiveImmigrationMythsExplained.pdf

Two New Studies Document Lack of Adequate Health Insurance Leads to Poor Health Care

Harvard Medical Study Finds Cost of Expanding Medicare to Near-elderly Uninsured Could Be Offset by Care Savings

Savings After Age 65 Might Be Pronounced for People with Chronic Disease

While the overall cost-effectiveness of Medicare benefits has been much debated, new data now show that people who were uninsured before receiving benefits at age 65 required more intensive and costlier care than those who had been privately insured prior to receiving Medicare.

John Ayanian, J. Michael McWilliams, and colleagues have shown that uninsured near-elderly patients with diabetes or cardiovascular disease likely would require fewer medical resources after entering the Medicare program if they had been insured prior to age 65.

more info http://focus.hms.harvard.edu/2007/071307/health_policy.shtml

A new report from the American Cancer Society finds substantial evidence that lack of adequate health insurance coverage is associated with less access to care
Insurance Status Linked to Cancer Outcomes

Atlanta 2007/12/20 -A new report from the American Cancer Society finds substantial evidence that lack of adequate health insurance coverage is associated with less access to care and poorer outcomes for cancer patients. The report finds the uninsured are less likely to receive recommended cancer screening tests, are more likely to be diagnosed with later stage disease, and have lower survival rates than those with private insurance for several cancers.

more info http://www.cancer.org/docroot/MED/content/MED_2_1x_Insurance_Status_Linked_to_Cancer_Outcomes.asp?sitearea=MED